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<ns0:Id>20250AB__089598AMD</ns0:Id>
<ns0:VersionNum>98</ns0:VersionNum>
<ns0:History>
<ns0:Action>
<ns0:ActionText>INTRODUCED</ns0:ActionText>
<ns0:ActionDate>2025-02-19</ns0:ActionDate>
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<ns0:Action>
<ns0:ActionText>AMENDED_ASSEMBLY</ns0:ActionText>
<ns0:ActionDate>2025-03-24</ns0:ActionDate>
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<ns0:LegislativeInfo>
<ns0:SessionYear>2025</ns0:SessionYear>
<ns0:SessionNum>0</ns0:SessionNum>
<ns0:MeasureType>AB</ns0:MeasureType>
<ns0:MeasureNum>895</ns0:MeasureNum>
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<ns0:AuthorText authorType="LEAD_AUTHOR">Introduced by Assembly Member Blanca Rubio</ns0:AuthorText>
<ns0:Authors>
<ns0:Legislator>
<ns0:Contribution>LEAD_AUTHOR</ns0:Contribution>
<ns0:House>ASSEMBLY</ns0:House>
<ns0:Name>Blanca Rubio</ns0:Name>
</ns0:Legislator>
</ns0:Authors>
<ns0:Title>An act to add and repeal Sections 17053.92 and 23692 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.</ns0:Title>
<ns0:RelatingClause>taxation, to take effect immediately, tax levy</ns0:RelatingClause>
<ns0:GeneralSubject>
<ns0:Subject>Personal Income Tax Law: Corporation Tax Law: credits: fast food restaurants.</ns0:Subject>
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<ns0:DigestText>
<html:p>The Personal Income Tax Law and the Corporation Tax Law allow various credits against the taxes imposed by those laws.</html:p>
<html:p>This bill, for taxable years beginning on or after January 1, 2026, and before January 1, 2031, would allow a credit against those taxes to qualified taxpayers, defined to mean certain fast food restaurant franchisees or independent operators, in the amount of $12,000 per qualified fast food restaurant, as defined.</html:p>
<html:p>Existing law requires any bill authorizing a new tax expenditure to contain, among other things, specific goals that the tax expenditure will achieve, detailed performance indicators, and data collection requirements. </html:p>
<html:p>This bill also would include additional information required for any bill authorizing a new tax expenditure. </html:p>
<html:p>This
bill would take effect immediately as a tax levy.</html:p>
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<ns0:DigestKey>
<ns0:VoteRequired>MAJORITY</ns0:VoteRequired>
<ns0:Appropriation>NO</ns0:Appropriation>
<ns0:FiscalCommittee>YES</ns0:FiscalCommittee>
<ns0:LocalProgram>NO</ns0:LocalProgram>
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<ns0:ImmediateEffect>YES</ns0:ImmediateEffect>
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<ns0:Urgency>NO</ns0:Urgency>
<ns0:TaxLevy>YES</ns0:TaxLevy>
<ns0:Election>NO</ns0:Election>
<ns0:UsualCurrentExpenses>NO</ns0:UsualCurrentExpenses>
<ns0:BudgetBill>NO</ns0:BudgetBill>
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<ns0:Bill id="bill">
<ns0:Preamble>The people of the State of California do enact as follows:</ns0:Preamble>
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<ns0:Num>SECTION 1.</ns0:Num>
<ns0:Content>
<html:p>This measure shall be known, and may be cited, as the Quick-Service Restaurant Affordability Act of 2025.</html:p>
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<ns0:Num>SEC. 2.</ns0:Num>
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<html:p>
(a)
<html:span class="EnSpace"/>
The Legislature finds and declares all of the following:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
It is a priority to promote policies that enhance affordability for businesses and residents, ensuring that economic growth and job opportunities remain accessible to all.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
The average quick-service restaurant experienced an overall cost increase of 35 percent in 2024.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
On April 1, 2024, the state mandated a 25 percent increase in the minimum wage that is paid to
all employees of quick-service restaurants.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
Family-owned quick-service restaurants in California incur, on average, an additional $12,000 per location in unemployment insurance contributions compared to other restaurant establishments within the state.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
It is the intent of the Legislature to provide financial relief to quick-service restaurant owners impacted by rising unemployment insurance costs due to state-mandated minimum wage increases. The purpose of this act is to establish a tax credit to offset these increased costs to quick-service restaurants.
</html:p>
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<ns0:BillSection id="id_81DF56B8-9C9D-4AA1-9FDF-EC8DE107E632">
<ns0:Num>SEC. 3.</ns0:Num>
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Section 17053.92 is added to the
<ns0:DocName>Revenue and Taxation Code</ns0:DocName>
, to read:
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<ns0:LawSection id="id_7927828E-7DC6-465E-9BAA-AE511B104A9F">
<ns0:Num>17053.92.</ns0:Num>
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<html:p>
(a)
<html:span class="EnSpace"/>
For each taxable year beginning on or after January 1, 2026, and before January 1, 2031, there shall be allowed as a credit against the “net tax,” as defined in Section 17039, an amount equal to twelve thousand dollars ($12,000) per qualified taxpayer per qualified fast food restaurant during the taxable year.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
For purposes of this section, the following definitions shall apply:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
“Qualified fast food restaurant” shall mean a restaurant that is subject to Part 4.5.5 (commencing with Section 1474) of Division 2 of the Labor Code.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
“Qualified taxpayer” shall mean a franchisee or independent fast food
restaurant operator with no more than 45 locations under common ownership within the State of California.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
In the case where the credit allowed pursuant to this section exceeds the “net tax,” the excess may be carried over to reduce the “net tax” in the following taxable year, and succeeding two years, if necessary, until the credit is exhausted.
</html:p>
<html:p>
(d)
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(1)
<html:span class="EnSpace"/>
In order to qualify for the credit, an employer shall annually demonstrate by reasonable means its compliance with appropriate provisions of the Labor Code, and shall maintain an active unemployment insurance account with the Employment Development Department.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
The Franchise Tax Board may request any information necessary from the Department of Industrial Relations to assist in the administration of this credit and ensure compliance by
qualified taxpayers.
</html:p>
<html:p>
(e)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
The Franchise Tax Board may prescribe rules, guidelines, procedures, or other guidance to carry out the purposes of this section. Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code shall not apply to any rule, guideline, or procedure prescribed by the Franchise Tax Board pursuant to this section.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
The Franchise Tax Board may prescribe any regulations necessary or appropriate to carry out the purposes of this section, including any regulations to prevent improper claims from being filed.
</html:p>
<html:p>
(f)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
For purposes of complying with Section 41, as it relates to the credit allowed by this section and Section 23692, the Legislature finds and declares as follows:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
The specific goal of the credit is to provide financial relief to fast food restaurant owners impacted by rising unemployment insurance costs.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
The performance indicators for the Legislature to use in determining if the credit has achieved this goal shall be the number of taxpayers claiming the credit, and the total dollar value of credit claimed per taxpayer.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
(A)
<html:span class="EnSpace"/>
The Franchise Tax Board, no later than December 1, 2027, and annually thereafter, shall submit a report to the Legislature, in compliance with Section 9795 of the Government Code, detailing the number of taxpayers claiming a credit pursuant to this
section or Section 23692, and the total dollar value of credits claimed.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
The disclosure requirements of this subdivision shall be treated as an exception to Section 19542.
</html:p>
<html:p>
(g)
<html:span class="EnSpace"/>
This section shall remain operative only until December 1, 2031, and as of that date is repealed.
</html:p>
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<ns0:BillSection id="id_48207531-FEC2-4C1C-9705-2BD2F1A8ED7A">
<ns0:Num>SEC. 4.</ns0:Num>
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Section 23692 is added to the
<ns0:DocName>Revenue and Taxation Code</ns0:DocName>
, to read:
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<ns0:Num>23692.</ns0:Num>
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<html:p>
(a)
<html:span class="EnSpace"/>
For each taxable year beginning on or after January 1, 2026, and before January 1, 2031, there shall be allowed as a credit against the “tax,” as defined in Section 23036, an amount equal to twelve thousand dollars ($12,000) per qualified taxpayer per qualified fast food restaurant during the taxable year.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
For purposes of this section, the following definitions shall apply:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
“Qualified fast food restaurant” shall mean a restaurant that is subject to Part 4.5.5 (commencing with Section 1474) of Division 2 of the Labor Code.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
“Qualified taxpayer” shall mean a franchisee or independent fast food
restaurant operator with no more than 45 locations under common ownership within the State of California.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
In the case where the credit allowed pursuant to this section exceeds the “tax,” the excess may be carried over to reduce the “tax” in the following taxable year, and succeeding two years, if necessary, until the credit is exhausted.
</html:p>
<html:p>
(d)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
In order to qualify for the credit, an employer shall annually demonstrate by reasonable means its compliance with appropriate provisions of the Labor Code, and shall maintain an active unemployment insurance account with the Employment Development Department.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
The Franchise Tax Board may request any information necessary from the Department of Industrial Relations to assist in the administration of this credit and ensure compliance by qualified
taxpayers.
</html:p>
<html:p>
(e)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
The Franchise Tax Board may prescribe rules, guidelines, procedures, or other guidance to carry out the purposes of this section. Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code shall not apply to any rule, guideline, or procedure prescribed by the Franchise Tax Board pursuant to this section.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
The Franchise Tax Board may prescribe any regulations necessary or appropriate to carry out the purposes of this section, including any regulations to prevent improper claims from being filed.
</html:p>
<html:p>
(f)
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This section shall
remain operative only until December 1, 2031, and as of that date is repealed.
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<ns0:BillSection id="id_F7698B82-CCFD-47E8-B510-E8BBE7D1D1E0">
<ns0:Num>SEC. 5.</ns0:Num>
<ns0:Content>
<html:p>This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect.</html:p>
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